Questions About Obamacare Medicaid Expansion

By Jack McHugh | February 18, 2013

Beware Obamacare bearing budget gifts: There is good evidence supporting a belief that any short-term fiscal gains for the state may be dwarfed by long-term liabilities we will regret for decades to come.

Cost-Shifting: Medicaid pays just 47 percent of what Michigan primary care physicians get from private insurers; reports suggests that Medicaid patients are the largest source of “uncompensated care” at health care facilities. Who do you think pays the difference? What effect will an additional 470,000 individuals on the Medicaid rolls have on that cost-shifting?

Unfair to Families: Unreformed Medicaid is a broken program that serves its beneficiaries poorly, and it’s getting progressively worse. Families in the 100-138 percent of Federal Poverty Level range will be much better served if the state does not expand Medicaid, because they will get a “real” (government-approved and taxpayer-subsidized) private insurance policy through the federal “exchange” that will be set up here.

Better Alternatives Available for Indigent: This still leaves a “donut hole” of uninsured childless adults below 100 percent of FPL who don’t qualify for Medicaid now but would under the expansion. This population is the largest source of an estimated $175 million in state-funded mental health services that the expansion would shift to the federal budget (in the short term). They also generate uncompensated physical health care expenses. But there are better ideas being discussed for how to meet those needs without expanding Medicaid.

No need for haste: If Michigan doesn’t expand Medicaid this year it can do so next year, or at any other time in the future. On the other hand, once the new entitlement is created for hundreds of thousands of people there is no going back. Prudence therefore dictates that our lawmakers wait to see what happens as Obamacare’s massive disruption of the entire health care delivery and finance system unfolds over the next year and beyond.

Preserve and Protect the Constitution: State officials have a duty to push back against Obamacare’s massive usurpation of the principles of federalism embodied in the U.S. Constitution. Resisting the law’s heavy-handed schemes to commandeer state governments into becoming mere executors of federal policy — including the Medicaid expansion — is part of that duty.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

Questions About Obamacare Medicaid Expansion

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